We have apps that track our steps, our calories, even our time spent in REM sleep. But what if we had an app that tracked time wasted doing mundane jobs? That might sound like a brilliant new product idea, but it’s unlikely to be the next unicorn startup. People who perform a lot of repetitive tasks during the workday are usually painfully aware of it. But more importantly, technology is one step ahead. Advances in automation now make it possible to sit back and let automated systems do the tedious work, freeing up our time for interesting, and ultimately more valuable, work. This is particularly true in accounting.
When it comes to finance teams’ daily workloads, accounting automation is a game changer.
What is accounting automation and how does it address the challenges of modern finance functions?
In simple terms, accounting automation means using computerized processes to perform accounting tasks. By that definition, accounting automation has been around for decades and most finance teams use at least some automated processes and systems. But many haven’t kept pace with the latest developments, so they’re still mired in efficiencies. Often, the problems are the result of working with a messy combination of different platforms, so time is wasted consolidating information. By using a consolidated platform with intelligent automation, finance teams can focus their attention on playing a more strategic role in a company.
Ten annoying tasks accounting automation can tackle.
1. A lengthy month-end close: You know the drill: When it’s time for the monthly close, all hands are on deck and other tasks fall to the wayside. For many teams, far too much time is wasted tracking down missing information and resolving questions around inaccuracies, which slows down the entire undertaking. But when automated processes and workflows keep books updated and balanced as transactions take place, a lengthy monthly close can become a thing of the past.
In fact, thanks to automation and intelligent spend management platforms, some organizations are moving to a continuous close instead of a monthly close. Here’s how it’s possible. A spend management platform continuously syncs spending activity with the GL. Supporting documents are uploaded in real time.
When all spending activities are tracked by the system as they happen, issues can be flagged and resolved before the end of the month, and finance teams always have an accurate, timely view into financial information.
2. Tracking down receipts: It happens to the best of us. Receipts get lost, misfiled, or put in the laundry – AP teams have heard it all. Mobile apps make it possible to take a photo of a receipt as an expense occurs, so the receipt can be submitted instantly. Even better, employees are automatically prompted to add any missing documentation like receipts to an expense. That way, the system enforces compliance to spending policies, which removes the burden of nagging coworkers to comply.
3. Adjusting categories: Thanks to innovations in automation and machine learning, AP teams using smart spend management systems no longer have to review and adjust expense categories. When using automated approval systems, expense requests are categorized as they are approved, so any anomalies are caught before money is spent. And machine learning tools can develop a recognition of spending patterns to automatically assign categories.
4. Data entry: Not too long ago, finance workers could spend hours just moving information from one system to another – a process that didn’t exactly draw on their training and expertise. When all financial systems automatically sync to the GL, that knowledge can be better utilized for higher-value tasks and analysis. The possibility of human error is also reduced.
5. Gathering files: When supporting documents are collected as expenses incur, and when expense approvals follow a set workflow, an audit trail is automatically created for each transaction. When it’s time for an audit, or if something must be verified, all evidentiary materials are readily available.
6. Matching invoices to purchase orders: When it comes to inefficient accounting processes, matching invoices, purchase orders, and receipts is near the top of most lists. A smart bill paying system can automatically complete the three-way match to verify that a bill is valid before initiating payment.
7. Piecing together context behind an invoice: All too often an invoice appears in an accountant’s or controller’s inbox with none of the supporting information needed to book the transaction and make payment. It becomes a time-consuming, sleuthing exercise to gather all the necessary information and documentation. Modern bill paying systems can automatically include the context of a bill payment, including using a little AI to automatically pull relevant information from email correspondence directly into an invoice inbox.
8. Creating bills from invoices: Using optical character recognition (OCR), a smart bill payment platform can automatically scan a submitted invoice and fill in details like vendor, invoice date, and amount.
9. Running time-consuming ad hoc custom reports: When data is maintained in real time and is available to everyone, finance and accounting teams don’t need to run interim reports for different departments when information is needed outside of the month-end close.
10. Manual reconciliation: The more accountants shift to consolidated platform solutions, and the more those solutions can push data between themselves, the less time will be spent on reconciliations. Take the example of the time-consuming process of reconciling credit card statements, when transactions need to be categorized and coded into the GL. This can be eliminated altogether with an automated spend management platform. Month-end bank reconciliations can also be made much easier when bank reporting can be aligned with transaction data in the GL.
Accounting automation can’t eliminate every boring task in your day – at least not until someone invents an app that can unload a dishwasher. But new developments in automated processes, when integrated with comprehensive spend management software, can take away many pain points associated with how companies spend non-payroll dollars so you can focus on the things that make a difference.
Want to learn more about automation in spend management systems? Schedule a demo today.